According to a report from The Verge, Microsoft is entering into the hardware business with a 7-inch gaming tablet. We’ve known for a while that Microsoft has had interest in building hardware for devices running its new Windows 8 operating system, but this tablet project appears to be an entirely new beast — though it’s been rumored since June.

The sources used in the report states the 7-inch gaming focused tablet would run on a modified version of Windows, similar to the Windows RT tablets, and would include “a custom ARM processor and high-bandwidth RAM.” While gaming will be the focus of this device, it may not be its explicit purpose as some other tablet functionality may remain in place.

It’s interesting to note the Xbox 720 is rumored to be built on Windows, likely a custom kernel of the operating system. This is the same way the Xbox Surface tablet is said to operate. The report from the Verge also made mention of the fact that the Xbox Surface tablet is being developed in Microsoft’s Silicon Valley offices and the company recently locked down Xbox-related buildings on its campus. This news means we could see an Xbox tablet before we see a new console from Microsoft.

Microsoft has yet to comment on the speculation, but all signs are pointing to an Xbox Surface offering from the Redmond based company. After some rough reviews on the first Surface, it makes sense that Microsoft might go back into its stable and come out with another offering branded with its powerhouse product. The Xbox brand is only eleven years old but is one of the most notable names in gaming. The mobile market has proven itself as a true embracer of games and entertainment, so slapping a well-recognized name in those fields onto a tablet seems like a no-brainer for marketing. If the Xbox 720 is truly being built on Windows and Microsoft is working on some sort of OS integration between its tablet and its gaming system, the Xbox Surface may become a must-have accessory for console gamers who remain loyal to Microsoft.